Royal DSM CEO Feike Sijbesma speaks at Davos. DSM was among the signatories to the ‘Business Manifesto,’ which calls for more ambitious government regulation of businesses.
Photograph: Ruben Sprich/Reuters

It’s been 34 years since Ronald Reagan, speaking at his first inauguration, told the American people that “Government is not the solution to our problem. Government is the problem.” But a growing trend of activist businesses suggests that Reagan’s succinct summary of the traditional, stereotypical business view of government has begun to fray at the edges.

Today, some of the world’s biggest businesses are calling for better – and more aggressive – government policy to tackle the biggest global challenges. In a “Business Manifesto” presented at Davos last month, for example, chief executives from SAB Miller, KPMG, Philips, Yara, GSK, DSM, Sumitomo Chemical, AkzoNobel, Novozymes, Unilever and others called for government leaders to be as ambitious as possible in the deals they reach at September’s Sustainable Development Goals summit in New York and December’s climate summit in Paris.

Looking at the specific policies endorsed by many of these business leaders, it isn’t hard to see how their proposals for government regulation dovetail with their economic self-interest. For example, many are calling for policies that address long term predictability in climate policy, a problem that, increasingly, is affecting global trade. Others are asking for governments to set ambitious global goals on a host of issues – like food and nutrition, water, sanitation and hygiene, energy and climate, gender equity, education and good governance – that affect their customers.

But while this business-based call for policy change may be somewhat self-interested, it still represents a significant shift in the corporate mindset since the Reagan era. Many CEOs now realize that there is a clear business case for good policy on sustainable development. Poverty, concentration of wealth and environmental challenges present clear threats to business. Unilever estimates that climate change already costs it €200m ($229m) a year.

What’s more, a growing number of companies are realizing that there are significant commercial opportunities for businesses that are prepared to address today’s global challenges, and the right policy frameworks can make a huge difference.

Philips’ healthcare and LED-lighting businesses have great commercial solutions for helping address health and climate challenges – and the right policy agreements in Paris and on the SDGs will grow the size of these markets. Similarly DSM sees market opportunity for its nutritional supplements from making tackling malnutrition a policy priority.

But this business case for government policy is only part of the explanation of what’s going on. Ultimately, business leaders are human beings too, and at that level, many have begun to recognize that some common challenges affecting all of us can only be solved with the help of coordinated government policy. As CEO Feike Sijbesma of DSM explains, “As a business leader, you cannot be successful, nor even call yourself successful, in a society that fails.”

This shift in mindset from business leaders is vital. For all the efforts of governments and NGOs, business still provides 90% of jobs in developing countries and 80% of capital flows. For the Sustainable Development Goals to be achieved, business has to be on board.

Clearly, not all business leaders are quite so forward-thinking. Globally, companies still lobby against workers’ rights legislation, environmental regulation and other sustainability initiatives. For example, research conducted by Oxfam suggests that the business community collectively spends €44m ($50.5m) a year lobbying Brussels to water down EU climate rules.

But it is remarkable how many of today’s business leaders are calling for more aggressive government policy – a sign that should signal to the policymakers negotiating deals in September and December that business will back them to go the extra mile. As Unilever CEO Paul Polman says, “We now have the opportunity to eradicate poverty and deal with the issue of climate change. What bigger opportunity do you want to see?”

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